BNN Bloomberg's mid-morning market update: October 16, 2020
Stocks rose after gauges of American retail sales and consumer sentiment topped estimates, while traders awaited news on a fresh round of stimulus measures. The dollar fell.
The S&P 500 rebounded from a three-day slide and was poised for its longest weekly advance since late August. Boeing Co. led gains in the Dow Jones Industrial Average as Europe’s regulator said the 737 Max plane may return to the region’s skies by year-end. Pfizer Inc. rallied after saying it could seek emergency-use authorization for its COVID-19 vaccine in the U.S. by late November if the shot is shown to be effective. Amazon.com Inc. slumped after Citigroup Inc. said the e-commerce giant’s statement on a recent sales event lacked something that has been seen in past years: A “biggest day ever” notation.
U.S. retail sales rose in September at the fastest pace in three months, while consumer sentiment ticked up in early October on an improved economic outlook -- though confidence remained well below pre-pandemic. Meanwhile, manufacturing production unexpectedly declined last month. The figures underscore the uneven pace of the economic rebound that’s being threatened by a new acceleration in coronavirus infections and Congress’s failure to agree on a fresh stimulus package.
“It’s encouraging we are seeing people willing to spend,” said Jeffrey Kleintop, chief global investment strategist for Charles Schwab, adding that the concern is “if we don’t get a stimulus deal, how much longer can that be sustained?”
House Speaker Nancy Pelosi told Democratic colleagues that a divide persists with the White House over a number of components of the fiscal stimulus she’s attempting to negotiate, even as an agreement nears on a coronavirus testing program. President Donald Trump’s economic adviser Larry Kudlow said in an interview with Fox Business Network it will be difficult for lawmakers to “execute” a relief package before the Nov. 3 election.
Friday brings the expiration of monthly options on U.S. equities, indexes and exchange-traded funds and notes, and possibly a good dose of turbulence. While the pace of transactions is less frenzied than before, analysts have spotted a worrying pattern: Much of the action remains concentrated in bullish options in some of the world’s largest technology companies. The industry has led gains in the S&P 500 this year.
Investors also monitored negotiations between Britain and the European Union, which are set to continue next week even after Boris Johnson said he believes a trade deal is now unlikely.
These are some of the main moves in markets:
The S&P 500 climbed 0.3 per cent as of 3:30 p.m. New York time.
The Stoxx Europe 600 Index jumped 1.3 per cent.
The MSCI Asia Pacific Index fell 0.1 per cent.
The Bloomberg Dollar Spot Index fell 0.2 per cent.
The euro advanced 0.1 per cent to US$1.172.
The British pound climbed 0.1 per cent to US$1.2922.
The Japanese yen was little changed at 105.40 per dollar.
The yield on 10-year Treasuries gained one basis point to 0.74 per cent.
Britain’s 10-year yield advanced less than one basis point to 0.182 per cent.
Germany’s 10-year yield dipped one basis point to -0.62 per cent.
West Texas Intermediate crude fell 0.1 per cent to US$40.91 a barrel.
Gold lost 0.3 per cent to US$1,902.22 an ounce.
--With assistance from Adam Haigh, Robert Brand, Todd White, Katherine Greifeld, Vildana Hajric and Sarah Ponczek.